Mastercard Works With Feedzai to Make Cryptocurrencies Mainstream; Here's how That can Prevent Fraud
Payments giants entering the blockchain space to protect consumers against fraud
The blockchain boom may not have received a lot of attention in its initial phases, but with the surge in demand for cryptocurrencies, major market players as well as governments have taken an interest. Although the unregulated currency is almost impossible to counterfeit, fake virtual assets and dubious dealings of crypto exchanges have made the market volatile and left investors vulnerable. With cryptocurrencies being used in cross-border transactions, Mastercard has taken a bold step in fortifying its defenses against cryptocurrency fraud by entering an exclusive partnership with Feedzai, a regulatory technology platform specializing in artificial intelligence. This strategic collaboration is geared towards enhancing the monitoring and prevention of fraudulent activities within the cryptocurrency space. Take a look at the tactics that will be deployed as part of the new partnership to keep scammers at bay in the blockchain economy.
Integrating Feedzai with CipherTrace Armada
The collaboration involves Feedzai integrating directly with Mastercard’s CipherTrace Armada platform, a crucial component used by banks to monitor transactions originating from over 6,000 cryptocurrency exchanges. This integrated approach aims to bolster the detection and prevention of fraud, money laundering, and other suspicious activities within the crypto realm. Feedzai's innovative RiskOps platform, analyzing transactions worth over $1.7 trillion annually, will now benefit from direct access to CipherTrace Armada's capabilities. This integration goes beyond a typical API connection, allowing Feedzai to seamlessly ingest data and provide real-time alerts for potentially fraudulent crypto transactions. It will also make sure that cryptocurrencies aren't used for funding criminal activities in the online realm.
Guarding against illicit activities
The partnership not only enhances fraud detection but also addresses the challenge of illicit transactions. An estimated 40% of scam transactions currently flow directly from bank accounts to cryptocurrency exchanges, according to Feedzai data. The integration aims to identify and block such transactions promptly, including the recognition of mule accounts used by fraudsters to launder funds or fund terrorism.
Mastercard's push for crypto's mainstream legitimacy
Mastercard's collaboration with Feedzai signals a strategic push to position cryptocurrencies as legitimate financial assets subject to the same regulatory frameworks as traditional assets. This aligns with the broader industry trend where financial institutions are cautiously navigating the integration of cryptocurrencies into their core offerings. By bringing virtual currency into the mainstream, the payments firm will put the spotlight on cryptocurrencies and pull them out of the shadows where investors are vulnerable and shady activities go undetected.
Acknowledging the surge in crypto frauds
The move comes at a critical time when crypto-related fraud and scams have surged globally. In 2022, there was a staggering 79% increase in crypto-related losses due to theft and scams compared to the previous year. Mastercard's vast network, used by banking institutions worldwide, is now poised to process and monetize crypto payments securely. Mastercard's collaboration with Feedzai represents a significant stride in fortifying the crypto space against fraud and illicit activities. By integrating Feedzai's artificial intelligence smarts with the robust capabilities of CipherTrace Armada, Mastercard aims to not only protect consumers but also contribute to the mainstream acceptance of cryptocurrencies within the financial landscape.
